Unscrupulous Contractors Using Questionable Methods to Bid Infrastructure Jobs

With $550 billion in infrastructure money on the horizon, unscrupulous nonunion contractors appear to be using a variety of methods to qualify for federal money. After being contacted by a worker who was allegedly taken advantage of by a pre-apprenticeship program viewed as fraudulent, BDN has uncovered a method in Nevada where questionable apprenticeship programs operate in partnership with certain corrupt contractors to tap into these funds.

Associated Builders and Contractors and Nevada On the Job Training are two examples of the ways this system of below board apprenticeship programs operate. ABC recently shut down their apprentice program in Northern Nevada and another – Nevada On the Job Training – has surfaced in its place. Although slightly different in their methods, both operations appear aimed at tapping into infrastructure money by exploiting unsuspecting workers.

Whats at Stake

As part of the Infrastructure Investment Jobs Act (IIJA), the Department of Transportation (DOT) has oversight in fielding applicants for certain grant programs. Programs such as INFRA (Infrastructure for Rebuilding America) contain revised language that accounts for inequality amongst undeserved communities and outlines ways in which the DOT programs will promote diversification on job sites. Within these grants, there are discretionary funds awarded by State DOTs that will provide contractors the opportunity to bid on PLA projects that they normally wouldn’t be allowed otherwise.

The Biden administration has now included revisions to the application process. This updated language is for this fiscal year and defines new guidelines that applicants must follow to qualify for the DOT grants. The Notice of Funding Opportunity - the official notification for applications of grants - language states that there are two new policy goals that will be taken into account. These are, "Climate Change and Environmental Justice Impacts, and Racial Equity and Barriers to Opportunity.”

Apprentices

A main goal of the IIJA is to support undeserved communities by creating jobs for local workers from all walks of life. The notice reads, “investments that improve or newly connect underserved communities to proactively address barriers to opportunity or redress past inequities and barriers to opportunity.” As part of this charge, IIJA discretionary funds will be given to contractors bidding jobs who demonstrate that they are hiring locally and from groups that have been historically excluded from key industries (i.e., minorities and women.)

Applicants for these types of infrastructure projects can demonstrate the ability to meet all these quotas and have the right to bid. Since the IIJA was announced late last year, and this year's application deadline for some infrastructure programs was May 23rd, this meant contractors potentially had months to scramble to find workers that fit the demographic guidelines.

ABC's operation in Nevada was seemingly a conduit for them to find workers to meet the May deadline.

Exploitation

Associated Builders and Contractors is a trade association that follows the "merit shop" philosophy meaning they are anti-union. They support a system marked by low standards and that is populated with contractors who exploit workers, and some who even commit tax fraud.

With over 21,000 members, ABC is a powerful lobby and were able to get their apprenticeship program approved. Their program theoretically provides a pipeline of workers for nonunion contractors to bid for the jobs bolstered by those IIJA discretionary funds. These contractors, in turn, pay into the apprenticeship; fattening ABC's coffers in what amounts to an alleged quid pro quo.

It was one of these ABC programs in Nevada that drove a former female apprentice to reach out to BDN. The apprentice was hired by Fisher Sand and Gravel and was dispatched to one of their job sites. As part of the ABC program, she alleges that she had only one week of class work and one week of hands-on soft training before being sent to the job site. This is all in contrast to union pre-apprenticeships which are structured and generally entail upwards of four weeks of training before being dispatched to work.

To add insult to injury, the female apprentice was allegedly required to take her class from 6-10 p.m. and then report to the Fisher job site at 4 A.M. According to her, the program was completely disorganized and at one point the class was even taught out of the husband/wife owner's house. Hardly a proper place for teaching purposes.

ABC has now abruptly shuttered their operation in Northern Nevada. The closure presumably was in conjunction with application deadlines. If this is true, then ABC has demonstrated that their apprenticeship program existed strictly to qualify their associated contractors for these programs, and once no longer needed in this regard, they cut and run. In the nonunion world such practices are not unheard of.

NVOJT

BDN was tipped off to another Nevada program currently operating to apparently fill the space that ABC’s closure opened. NVOJT appears to be a classic a fly-by-night operation with no accreditation and deceptive language in their recruitment materials. Even worse than ABC's program, they are exploiting a loophole in the system by serving as a temp agency of sorts. Because there is no language providing oversight covering apprenticeship training, NVOJT can essentially operate as a labor broker.

According to one union representative, "NVOJT is simply providing a Rolodex for contractors to meet quotas. They are unaccredited, they run no training programs. They appear to simply open their Rolodex to shady contractors and take a per hour payoff for faceless/ nameless bodies. They are entirely operating in a grey area no different than a coyote bringing bodies across the border!”

A look at the language used on NVOJT's promotional materials and their modus operandi is clear; to recruit from all the categories that qualify partner/ contractors namely women and minorities. The NVOJT.com website is sparse, populated with only a mission statement:

"An On-The-Job Training program is a Federal Highway Administration requirement for all states. The objective of the NDOT pilot OJT program is to address the underrepresentation of minority, female, veteran, and economically disadvantaged individuals in the highway construction trades through the establishment of OJT objectives in these projects. The primary objective of the NDOT pilot OJT program is the training and upgrading of minorities, women, veteran, and disadvantaged individuals through the completion of craft apprenticeship programs on a project to achieve journey-level status on NDOT Federal-Aid contracts."

The flyer, however, seems entirely misleading. The language on the flyer insinuates affiliation with Nevada DOT and the Federal Highway Administration. This is untrue. NVOJT appears to be nothing more than a labor broker. Their strategy is to recruit minorities and women and send them directly to contractors without any apparent regard for acceptable training. Their model provides a pipeline of workers that will satisfy any reporting contractors are required to submit as part of PLAs they have qualified for.

Closing the loophole

The discretionary funding program was launched with the best of intentions. What it has created is a wild west where there are contractors looking to tap into these funds with no regard for President Biden's aim to “-create good union jobs.” Unfortunately, without oversight and clear language stipulating the path to apprenticeship, the workers are easily exploitable.

Nevada unions are uncovering this loophole and fighting to close it, but with money flowing and a set time limit for the work, it is imperative that the loophole is closed post haste. With the shuttering of ABC and NVOTJ apparently popping up in its place, there are clearly many players in the game. And contractors willing to tap into an untrained workforce to steal infrastructure money from properly trained apprentices.

Contractors with a criminal connection like Fisher, who pay into the apprenticeship, are provided a workforce that allows them to qualify for the IIJA funds and bolster numbers to maintain their façade.

This apparent gaming of the IIJA in this way is a perversion of what it aims to facilitate. As is often the case with non-signatory contractors, they ultimately prescribe to a methodology that is about the bottom line with no real concern for the welfare of the worker. ABC is a powerful conglomerate that is the antithesis of what unions stand for. NVOTJ is even worse because it operates under the radar and feeds potentially under trained and exploited workers into a system that is supposed to correct this- exactly like a labor broker.

The story BDN’s whistleblower related and the vagueness of NVOJT’s operation is another example of how unknowing workers can be taken advantage of and points up the need for legitimately accredited apprenticeship programs. This is how it should be done and is what the Infrastructure Investment and Jobs Act sets out to do - to eliminate these grey areas and promote equality.